My dear Chidambaram( Direct stock market implications)

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My dear Chidambaram
Considering that you had to do a balancing act catering to a wide spectrum
Considering that you had to pander to many a communist tantrum
Your budget is so wonderful that one feels like beating a drum
One doesnt mind getting intoxicated by whisky and Rum
It is indeed difficult to maintain decorum
Your budget has really put India on a higher rostrum
You have proved that for economic progress, an astute politician can be a fulcrum
Whether individually or in quorum
I hope you and your budget are not only appreciated in this but each & every forum.

So wonderful is your budget
That one hopes that it sets Indias fortunes set soaring as a Jet
Only in implementation if you fidget
It will remain a kind of Vignette

Let us see how it affects the stock market directly:-

Allowing FIIs to use collaterals against derivatives trading and using shrares as margin rather than cash margin would increase their retuirns and attract more such invetors to Indian market.

The change of derivatives trading income from speculative to business income should give a tremendous boost to trading. One can set off losses against income from derivatives trades and the tax also reduced to 10%.

Interest rates are expected to remain steady and boost corporate profits with the was corporate and personal tax is cut.Less corporate and personal taxes leave more income in the hands of investing companies and individuals for investment

Times of India reports that corporate taxes should add around 2.5% to company profits. This would inturn induce more investors to come to the market.

These are to my mind the direct implications of the budget on the stock market which is a good sequel to the abolition of long term capital gains tax last year and reduction of short term tax. By unanimous opinion, it is deemed a very good budget, all the proposals for various sectors should boost profitabilty and market sentiment indirectly as well.

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Somebody sent me an email stating that the poem was not reflective of the situation considering the kind of flak the finance minsiter was receiving.

All I can say is that in a vast exercise like budget, one should budget for some mistakes. He is human after all and he should reconsider like last year's turnovertax. Besides with Manmohan Singh and Chdiambaram at the helm of affairs, the major trend is positive and one should not worry about such dips as advocated by classical Technical analysis.